Has AstraZeneca finally arrived? Seems so, with oncology and China growth—at least for now

Tagrisso, Lynparza and Imfinzi, as well as China, have teamed up for growth at AstraZeneca. (AstraZeneca)

Once again, AstraZeneca’s newer cancer drugs Tagrisso, Lynparza and Imfinzi, as well as China, have teamed up for growth. But each faces its own fight just around the corner.

EGFR lung cancer drug Tagrisso has already established itself as AstraZeneca’s top-selling medicine, and it shows no sign of slowing down. In the third quarter, it grew sales by 13.6% over the previous period, to $891 million, surpassing analysts’ projections by 4%.

Meanwhile, immuno-oncology therapy Imfinzi seems to have grown past its first-lung lung cancer failure last year. By Q3, the drug had already become a member of the blockbuster club, with sales in the first nine months reaching $1.05 billion. And PARP inhibitor Lynparza’s $327 million haul in Q3 was also 8% ahead of expectations.

However, for Tagrisso in the U.S., AstraZeneca said some of that sequential growth came from gross-to-net and stocking adjustments, which raised the question of whether the drug’s true underlying demand has slowed.

Tagrisso’s U.S. sales jumped to $350 million in Q3 from $300 million in Q2. According to Dave Fredrickson, AZ’s oncology commercial head, half of that growth came from increased demand.

The drug’s future success depends on other regions as well, and one of them is China, which has contributed 21% to AZ’s top line year-to-date. After Tagrisso’s second-line use landed on China’s national reimbursement formulary, the drugs’ emerging markets sales more than doubled to $553 million for that nine-month period, “with notable growth in China,” AZ said.

And as of September, Tagrisso has its Chinese approval in new patients with EGFR-positive non-small cell lung cancer. Now, the British drugmaker is eyeing reimbursement for that new indication, with Chinese government negotiations expected next year.

EGFR mutation in China's NSCLC patients stands at around 30% to 40%, more than any other country in the world, and almost double the rate seen in Western countries. Because Tagrisso’s front-line use is not limited to T790M mutation—as its second-line OK is—twice as many patients would be eligible for treatment, Fredrickson said. And because first-line patients are by definition treated earlier, the duration of treatment is about 80% longer, he added.

AZ previously said it had expected China growth to slow in the second half of the year, but in Q3, the country still turned up a whopping 40% increase at constant exchange rates. That doesn’t mean the hiccups in China have disappeared, however—only delayed.

The national rollout of a bulk procurement program that’s meant to cut prices of some older medicines was slower than expected, CEO Pascal Soriot told reporters on a Thursday call.

Specifically, AZ won the expanded tender for Tagrisso predecessor Iressa after a price cut, but lost to generics for Crestor, according to bidding results published in late September. And even the Iressa contract is not a home run, because AZ is sharing it with two other, cheaper generics that got to pick their markets to supply before AZ did.

As a result, AZ expects to see pricing pressure from those two key meds kick off in Q4 and get into full swing next year, Soriot said. It projects mid-term overall China growth in the mid-teens, he said.

For Imfinzi, all eyes will be on data later this year from the Poseidon trial, in which the anti-PD-L1 is paired with chemo with or without AZ’s investigational CTLA4 drug tremelimumab in first-line NSCLC. In August, AZ said the dual immuno-oncology combo failed to top standard-of-care platinum chemo in previously untreated NSCLC. And let’s not forget Bristol-Myers Squibb just unveiled phase 3 data showing its own PD-1-CTLA4 combo in Opdivo and Yervoy, combined with chemo, had extended patients’ lives compared with chemo alone in first-line NSCLC.

Meanwhile, Lynparza has established itself as the leader in the PARP inhibitor field, but GlaxoSmithKline is putting up a fight with its newly acquired Zejula. At the recent European Society for Medical Oncology annual meeting, both drugs have data showing they could significantly cut the risk of disease progression or death in ovarian cancer patients who had responded to one round of chemotherapy, regardless of their BRCA mutation status.

During Thursday's investor call, AZ oncology R&D chief José Baselga pointed to Lynparza’s recent win in previously treated metastatic, castration-resistant prostate cancer, as well as “a large number of combination studies” as evidence of the drug’s ongoing potential.

Still, despite all its cancer-drug success, Soriot doesn’t want people to think AZ is planning to become an oncology-focused company. “We have a broad base of progress across the therapy areas,” he told reporters during a media briefing ahead of the investor call. “We have many engines of growth, we are very diversified with a broad portfolio, which means we are less exposed to something wrong happening with one product or another. We are also very diversified geographically.”

All told, AZ’s product sales climbed 18% in the third quarter to $6.13 billion in constant currencies, 5% ahead of the Street’s expectations. The company upgraded its guidance and now expects sales to rise by a low- to mid-teens percentage for the full year.